Risk Management

Risk Analysis: A Dire Need or Motivating Factor?

All project management organizations encounter unforeseen risks in their quest to achieve project success. Risks are pitfalls that can aggregate or halt progress of not just a project, but the entire venture. So, how can project teams avoid them? In this whitepaper by PMI, you will acquire valuable insight into the categories of project risks. Also, you will get knowledge about the core difference between the uncertainties and risks. Uncertainty is the irregularity between the data required to accomplish a task and the extent of information necessary to preserve it. In contrast, a risk is the advent of an uncertain situation that can create significant issues in a project’s progress.

What Is the Correlation?

A project risk is an uncertainty that can have a negative or positive influence on your teams. It not only impacts the zeal to achieve desired results but also slows down the speed of development. Once the teams learn about uncertainties, they can concentrate on accomplishing the project goals without being distracted by potential risks.

Risk Categorization

Knowing the risk category would help you analyze the project constraints in a management hierarchy. Thus, you can understand at which level it is affecting the project progress. Here are the main risk categories affecting the project objectives:

  • Operational Risks: These risks hinder the immediate project results due to technical glitches or some other evident reasons.
  • Strategic Risks: These risks create roadblocks for the short-term and long-term objectives of a project. The short-term strategic risks are specific to the client’s requirement from the project, while the long-term version reveals the real purpose. It ascertains the contribution of the project to your business or economy.

The operational benchmarks of a project help you calculate long-term or short-term strategies to overcome the risks. Failure of a project has nothing to do with the team’s potential, but certainly, the project owner or sponsor pays the price for it. Strategic goals, business objectives, and resource allocation are project influencers. If used wisely, they can turn into project success.

Click on the following link to read the original article: https://www.pmi.org/learning/library/categorizing-risks-project-risk-management-6847

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